Strategic Workforce Planning

In my consulting practice, I am often asked what it takes to develop an effective strategic workforce plan.  Strategic workforce planning is a complex task, and many organizations engage in workforce planning that is more ‘operational’ than it is ‘strategic’.

So what’s the difference anyway?  Operational workforce planning is focused on specific headcount and staffing requirements in the immediate and short term future (6 – 8 months).  Strategic workforce planning goes beyond this and takes into consideration the longer term future (2 – 5 years or more). The purpose of strategic workforce planning is to ensure that an organization has suitable access to talent (potential candidates with required competencies) to ensure current and future business success.

strategic workforce planningEffective workforce planning begins with reviewing the organization’s strategic plan to identify competencies required for success.  The strategic plan can provide insights into expected changes that may have significant implications for an organization’s demand for particular skills or competencies.  Taking this into account, it’s important to examine talent requirements, now and into the future, to ensure achievement of strategic objectives.

The next step is to identify critical roles within the organization.  These are key positions that exert an important influence on operational activities or strategic objectives.  If these roles are left unfilled, the organization would not be able to meet its business requirements.  Loss of an incumbent, for even a short period of time, would seriously impact success.  Critical roles are not confined to senior levels, and extend to include key positions throughout the organization.

From here, it is necessary to conduct an environmental scan.  This involves a review of demographic, economic, social, political and technological trends.  It’s important to consider how these trends may impact how the business operates, who it serves and who it employs.  For example, factors including the aging workforce, changing employee expectations, and advancements in technology need to be taken into consideration when developing a strategic workforce plan.

After conducting an environmental scan, examine the current state of the organization to assess the characteristics, competencies and distribution of the workforce at present.  This takes into consideration permanent employees and contract staff.  The purpose of this step is to identify the demand and supply of talent, as it stands ‘today’.

Next, look to the future and examine various possible scenarios.  Consider what would happen if the organization continued on its current path, using statistical and predictive methods to project data trends.  Also examine various scenarios that could occur to factor in possible risks, making use of similar statistical and predictive methods to chart the trends. Then select a “targeted future” which is the future that is deemed to be most likely to position the organization for strategic success given the surrounding factors.

The targeted future should be the focus of action planning efforts.  Two factors are taken into consideration: the estimated workload and related staffing requirements; and the likely competencies and skill sets needed. Workload analyses are used to predict how much work will need to be done; staffing analyses are used to project how many people will be needed; and competency assessments tell us they types of competencies the workforce will need to possess in order to successfully achieve strategic objectives.

From here, conduct a “gap analysis”.  This involves comparing the current state with the targeted future state to identify any talent gaps that would prevent the achievement of strategic objectives.  A gap analysis will reveal areas where the organization will need more employees, different skill sets and competencies, or revised positions and work processes.

At the conclusion of this exercise, it is necessary to create an action plan to fill the gaps identified.  This plan can involve retaining staff with required skills and competencies, transferring organizational knowledge, developing talent, recruiting employees with necessary skills, and reducing positions that are no longer required.

Lastly, it is important to evaluate the effectiveness of the gap closing strategies and revise them as necessary.  This involves monitoring implementation of the plan and evaluating results to ensure that the workforce planning assumptions made were valid, the strategies are being implemented as planned, and the desired outcomes are being achieved.